Tab_1_JA_Amd_for_B2_DMS__30JUL2013_Redacted.pdf

COORDINATION AND APPROVAL DOCUMENT

(also known as Justification Review Document)

Amendment 1

Contracting Activity: AFSC/PZABC

Purchase Request/Local Identification Number: FD2030-11-37101

Project/Program Name: Overhaul of B-2 Defense Management System (DMS)

Amended Estimated Contract Cost (including options):

Type Program: Other Contracting

Authority: 10 U.S.C. 2304(c)(1), as implemented by FAR 6.302-1(a)(2)(iii)(A&B) with an application pursuant to FAR 6.302-1(b)(2)

Type J&A: Individual

COORDINATION: DATE

____ _______________ _7 Feb 13_

Requiring Official

424 SCMS Director

____ _______________ _7 Feb 13_

Contracting Officer

AFSC PZABC

_____ __________________ _11 Feb 13_

Legal Reviewer

USAF/72ABW/JAQ/

______ ____________________ _14 Feb 13_

Competition Advocate

AFSC/PZC

_____ ___________________ _4 Mar 13_

Senior Center Contracting Official

____ ________________ _2 May 13_

Director or Deputy Contracting (HQ AFMC/PK)

____ _______________________ _8 Jul 13___

Deputy Assistant Secretary (Contracting) (DAS(C))

APPROVED:

____________//SIGNED//_______________________ 10 Jul 13

Senior Procurement Executive

CHARLES R. DAVIS, Lt Gen, USAF

AMENDED JUSTIFICATION FOR OTHER THAN

FULL AND OPEN COMPETITION

Amendment 1

I. CONTRACTING ACTIVITY

Air Force Sustainment Center

Materiel Support Contracting Division

AFSC/PZABC

3001 Staff Drive

Tinker AFB, OK 73145-3032

PR# FD2030-11-37101

II. NATURE AND/OR DESCRIPTION OF THE ACTION BEING PROCESSED

Estimated award date in the original J&A was Oct 12. An award was not made at that time. The

Government received Lockheed Martin’s proposal in Nov 12, which caused the shift of the estimated date of award to Jul 13.

Previous Overhaul History:

Contract Number: FA8119-09-D-0007

Award Date: 31 Mar 09

Ordering Period End Date: 30 Sep 12

Delivery Order Completion Date: 01 Jul 13

Contractor: Lockheed Martin

The original J&A (approved 24 May 12) requires revision and correction prior to contract award due to refinement of the requirement and changes in the contractor repair processes resulting from a joint Rapid Improvement Event conducted with the government. Therefore, this amendment addresses the following:

Corrects wording from the original J&A to reflect “overhaul” vs. “repair” to more accurately reflect the scope of effort required. (Repair: gets item back to serviceable condition and subject to Service Contract Act [SCA]/Overhaul: more extensive than repair and adds to the useful life of the item and subject to SCA)

Accounts for an increase in the overall estimated dollars;

Reallocates estimated costs for the following:

o CLIN 0001 – Receiver Countermeasures o CLIN 0007 – Material Lay-In o CLIN 0008 – Overhaul Management

Increases the estimates for Material Lay-In (CLIN 0007) as a result the Rapid

Improvement Event decision to replace failure prone signal attenuators (referred to as

Harris Pucks) with new versions (Triquint Pucks).

As a result of the changes contained within, there is a corresponding increase in the estimated value of the contract from . This increase necessitates the change in the approval level to the Head of Procuring Activity or Designee to the Senior Procurement

Executive.

V. DEMONSTRATION THAT THE CONTRACTOR’S UNIQUE QUALIFICATIONS OR

NATURE OF THE ACQUISITION REQUIRES THE USE OF THE AUTHORITY CITED

ABOVE (APPLICABILITY OF AUTHORITY)

(1) “Follow-on Contract.”

This contract effort is the logical follow-on to the current contract with Lockheed Martin, contract

FA8119-09-D-0007, awarded 31 Mar 09 and expiring 01 Jul 13. It is imperative to maintain long-term contract coverage in order to ensure assets continue to be inducted and overhauled to support the B-2. Each B-2 aircraft requires all components to be operational and functional in order to perform operational missions.

(2) “Highly Specialized Services.”

Overhaul of the B-2 DMS is a highly specialized service. The DMS operation is critical to successful execution of bombing missions in hostile airspace. Lockheed Martin developed this technology as well as specialized technical repair procedures and equipment. Lockheed DMS engineers and technicians are the only personnel available with the knowledge and expertise to overhaul these items. Especially critical are the Programmable Read Only Memory (PROM) and

Programmed Logic Devices (PLD) in these Line Replaceable Units (LRU). If those PROMs or

PLDs have failed, only Lockheed Martin has the data to load new PROMs and PLDs.

Furthermore, many of the components in these LRUs are Hardness Critical Items (HCIs) and must be properly procured from qualified vendors and certified for use in order to support the nuclear mission of the aircraft. The Air Force does not have the acceptance criteria for overhaul of these items and did not purchase the repair tech data. Therefore, this acquisition is for continued performance of a highly specialized service (overhaul of B-2 DMS).

(3) “Substantial Duplication of Cost.”

Pursuant to the authority cited in 6.302-1(a)(2)(iii)(a), the 448 SCMW believes that award to any other source would result in substantial duplication of cost to the Government that is not expected to be recovered through competition. The drawings and equipment necessary to complete this legacy repair contract are proprietary to Lockheed Martin. Efforts by the Government to purchase the data have been unsuccessful, which resulted in this sole source acquisition. The Contractor was asked on 17 Apr 13 for the estimated cost to acquire the data. They provided a Rough Order of Magnitude (ROM) estimate of . A basis of the estimate is not available since a full cost proposal was not requested nor provided. In addition, a Business Case Analysis (BCA) was conducted by the Air Force in support of an approved 2011 Source of Repair Activity

(SORA) decision. This decision would be required if the Government was to transition the repair to organic. The cost would be at least and would take just to develop the

Test Program Sets for use in organic test sets. Currently, there are various specialized tooling and support equipment required for overhaul of DMS. Transporting the equipment to another facility would add an additional cost of approximately as well as time to disassemble and reassemble. The estimate of includes the cost of disassembly/reassembly, recalibration of the equipment, and cost of transporting the equipment to the contractor’s facility.

While these costs are estimates for the stand-up of organic workload, nothing suggests commercial vendors would require any less money to set up this highly specialized service for a aircraft fleet. As described in Section XI, the current DMS hardware is being phased out over the next years and will be replaced by the

For comparison purposes, this source selection demonstrates the estimated cost in the event the Government was to perform a source selection for the current B-2 DMS effort. Even if it was technically possible, the cost, time and effort to establish a second overhaul source would yield little to no return on investment in the short time remaining on the current legacy system service life.

(4) “Unacceptable Delays.”

Pursuant to the authority cited in 6.302-1(a)(2)(iii)(b), the 448 SCMW believes that award to any other source would also result in unacceptable delays in fulfilling the Air Force’s requirements.

The Original Equipment Manufacturer (OEM), Lockheed Martin, owns the repair technical data rights to DMS components. They also developed unique procedures and equipment for the repair of these components. Lockheed Martin is not willing to sell the data required to draft adequate specifications of the overhaul of these NSNs. Even if the Government were to successfully negotiate and acquire the data, it would take approximately to approve potential sources to overhaul the DMS. Once these potential sources were identified, developing the proper testing could take up to as outlined in the .

Furthermore, developing a second source would require the use of already scarce assets in order to fully develop the repairs. The estimated the impact of diverting these resources unable to perform missions during the years these assets were out of the inventory. In addition, if no repair capability is active during this transition period, Pursuant to the authority cited in 6.302-

1(a)(2)(iii)(b), this contract will prevent the unacceptable delays as explained above.

Accordingly, Lockheed Martin is the only firm capable of providing the supplies and services described in Section III above without the U.S. Air Force experiencing substantial duplication of cost that could not be expected to be recovered through competition and unacceptable delays in fulfilling its requirements.

VI. DESCRIPTION OF EFFORTS MADE TO ENSURE THAT OFFERS ARE SOLICITED

FROM AS MANY POTENTIAL SOURCES AS DEEMED PRACTICABLE

A Sources Sought Synopsis (SSS) was issued on 1 May 12 to identify any capable sources for overhaul of NSNs: 5865-01-461-0044, 5865-01-438-4321, 5865-01-445-0685, 5996-01-380-5485, 5996-01-587-2616, and 5996-01-587-7742 for a 3-year basic period with a one, 2-year option period. The results of the Sources Sought Notice identified Lockheed Martin as the only qualified source for the overhaul of these items. However, three other sources responded to the SSS.

Lockheed Martin Corporation (Cage Code: 03640)

1801 State Route 17C

Owego, NY 13827-3900

Phone Number: 607-751-5448

Wounded Warrior Veterans Directory

Veteran Industries, LLC

221 E. Fairfax St, Berryville, VA 22611

Tripartite Escrow Corporation

1865 Herndon Ave., #K114

Clovis, California 93611

Afghan Royal First Logistics

Kabul, Afghanistan

The criteria for determining the unacceptability of the three additional respondents is addressed in

Section VIII.

This requirement was synopsized on the Federal Business Opportunities website (FBO) and the solicitation (RFP) was posted to FBO for 30 days from 30 Jul 12 to 29 Aug 12.

VII. DETERMINATION BY THE CONTRACTING OFFICER THAT THE ANTICIPATED

COST TO THE GOVERNMENT WILL BE FAIR AND REASONABLE

The Contracting Officer will ensure that the items described herein are negotiated at a fair and reasonable price to the Government. Certified cost or pricing data will be required to ensure negotiated prices are fair and reasonable to the Government. The Contracting Officer requested a technical evaluation from the Defense Contract Management Agency (DCMA) and a field audit from the Defense Contract Audit Agency (DCAA). A detailed cost analysis and a price analysis will be performed.

VIII. DESCRIPTION OF THE MARKET RESEARCH CONDUCTED AND THE RESULTS,

OR A STATEMENT OF THE REASONS MARKET RESEARCH WAS NOT

CONDUCTED

As described in Section VI above, market research, in accordance with FAR Part 10, was conducted by synopsis of the proposed acquisition, advising industry of the pending acquisition and soliciting inquiries from interested parties.

A sources sought announcement was advertised on FBO from 1 May 12 through 2 Jun 12 to see if other sources had the capability to perform this overhaul workload at the Line Replaceable Unit level. The Government did not research subassembly capability due to the fact Lockheed Martin owns all technical data. Upon contract award, Lockheed Martin may qualify additional sources for subassembly subcontracting efforts. The responses to the sources sought were as follows:

Wounded Warrior Veterans Directory - An Internet search of this company revealed that this company is only a directory service of other businesses. It is not in itself a viable source to perform this workload.

Tripartite Escrow Corporation - An Internet search of this company revealed that this company provides financial avenues for other companies to bid upon

Government contracts. It is not a viable source to perform this workload.

Afghan Royal First Logistics - An Internet evaluation of this company could not be performed because the website http://afghanroyal.com/ was blocked by Air Force network firewalls. This company is not considered a viable source because they are a self-professed foreign-owned entity, and because the engineering data for these items are export controlled.

In addition, the following companies have been involved in DMS construction and repair for different types of aircraft:

Lockheed Martin Corporation

Northrop Grumman Corporation

The Boeing Company

The three companies were contacted and provided a survey to assess capabilities and interest in overhauling the B-2 DMS for this effort. Northrop Grumman and Boeing both responded and stated they did not have access to the drawings, repair manuals, Acceptance Test Procedures

(ATPs), OEM parts breakout, specialized test equipment, or the test tolerances. Lockheed Martin is the only respondent that has the necessary data, test equipment, software and trained personnel to overhaul the B-2 DMS.

IX. ANY OTHER FACTS SUPPORTING THE USE OF OTHER THAN FULL AND OPEN

COMPETITION

None

X. LIST OF SOURCES, IF ANY, THAT EXPRESSED INTEREST IN THE ACQUISITION

See Section VI above.

XI. A STATEMENT OF THE ACTIONS, IF ANY, THE AGENCY MAY TAKE TO REMOVE

OR OVERCOME ANY BARRIERS TO COMPETITION BEFORE MAKING

SUBSEQUENT ACQUISITIONS FOR THE SUPPLIES OR SERVICES REQUIRED

The current DMS hardware covered by this J&A is being phased out over the . The capability for the B-2 was subjected to a competitive bid process by the System Program Office through their Integrator, Northrop Grumman. As a result of this competition, was selected as the winner.

The substantial duplication of cost to the Government to acquire the data and qualify new sources for legacy DMS repair is not expected to be recovered through competition before is implemented.

Should potential overhaul contractors in addition to those listed in Section VIII express interest in this workload, they will be contacted to determine if they have repair capability of the DMS Line

Replaceable Units (LRUs). If the contractor has the capability and expresses an interest in overhauling the LRUs, they will be asked for Rough Order of Magnitude (ROM) pricing and technical information on their overhaul.

XII. CONTRACTING OFFICER’S CERTIFICATION

The contracting officer’s signature on the Coordination and Approval Document evidences that she has determined this document to be both accurate and complete to the best of her knowledge and belief.

XIII. TECHNICAL/REQUIREMENTS PERSONNEL’S CERTIFICATION

As evidenced by their signatures on the J&A Coordination and Approval Cover Page, the technical and /or requirements personnel have certified that any supporting data contained herein which is their responsibility is both accurate and complete.